Thursday, 27 May 2010

1 of 5. Why change?

This is the first blog in a series of 5 on leadership and change.

Do not follow where the path may lead. Go instead where there is no path and leave a trail.
Harold R. McAlindon (also attributed to Emerson and others)

We all know and accept that today's business world is highly competitive. However the challenge we often have is that knowing and doing for the majority is a step too far. Short term thinking without planning is killing modern business. Yes we need to be adaptable, but adaptable and flexible in a controlled fashion are very, very different to knee jerk decision making. The way to survive is to reshape to the needs of a rapidly changing world. Resistance to change is a dead-end street for you and your organisation. Customers are not only demanding excellent service, they are also demanding more. If you do not supply it, your competitors will. Organisations are reshaping themselves to change quickly in order to meet the needs of their customers. The culture of business is becoming more controlling and less creative. The organisation's top leaders know they cannot throw money at every problem and that they need highly committed and flexible people.

As a leader, you need to emphasise action to make the change as quickly and smoothly as possible. 'Innovate or die'. This mantra has been repeated so many times - by the media, governments, business leaders, business professors, consultants and management gurus - that people have come to assume it is actually true. A light bulb overhead may signal a bright idea in cartoons and comic books, but in today's business world companies can't sit around waiting for creative bolts of inspiration. Long-lasting success requires a process of innovation that is predictable and consistent. However innovation is not an isolated programme of activities. It must be part of the fabric of the organisation and interwoven into each and every activity. Modern economies are being continuously challenged by changes in the global economic landscape. Generation of knowledge and the application of that knowledge leads to the rapid development of products, processes and services. The speed of these developments is being driven by more discerning customers and the increase in global markets.

Economies can no longer compete on wage levels, innovation is the key driver for competitiveness for today's global market.

Innovation in business takes six main forms:
• Leaders who embrace innovation
• People who are encouraged to innovate
• Product - new or improved goods or services
• Process - improved production or delivery
• Organisational - business practices, workplace and external relations
• Marketing - product or service design, packaging, promotion and pricing

Much more on innovation and its methodology and impact in a later blog in this series. However one of the fundamental problems with any new programme or right angle turn is that change is not always welcomed. In fact when you need to change, most organisations have gone past the point where they can change (more on this in the 3rd blog of the series on the Sigmoid Curve). Around 70% of change management projects fail to achieve any results at all. But in these tough times adaptability may be crucial to survival. It seems that if companies want change to happen in their organisation, one of the worst things they can do is call the projects they plan 'change management'. This is the conclusion of a recent McKinsey report that shows 70% of so-called change management programmes fail to deliver many of the results they expect.

In times of prosperity not achieving all change can be tolerated. The problem now, though, is that as the economy enters recession, we will once again see change management take centre stage. Worse still, rescue and realignment projects will not be about tweaking business processes. Change may be the key to a company's very survival. The recession is a punctuation point. Prompt action can save the day, but now everyone has to see the need for change and sign up to it.


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